Vi Might Lose More Customers In April-June Quarter Due To Lockdown

Vi (Vodafone-Idea) is likely to lose more customers due to the second wave of Covid-19, high chances of lockdown, night curfew, and other restrictions. However, both Airtel and Reliance Jio have the potential to manage the slowdown in the user addition in the Q1 FY22.

"Rising Covid cases and selective lockdowns/restrictions on movement would impact net adds as well as consumer sentiment, and we see the risks of potential tariff hike further pushed back," BofA Securities was quoted by ET.

Analysts said that this situation is going to affect Vodafone Idea and it might post a loss in the Q1 of the financial year. They also said that both Airtel and Reliance Jio might expand their broadband services in the country as the data consumption is likely to increase further due to lockdown and most of the people are choosing work from home.

"A potential slowdown in user adds in the June quarter amid fresh lockdowns could delay tariff hikes by around 3-to-6 months, which would further hurt Vi's precarious financials, widen its losses and lead to more customer losses," said Nitin Soni, senior director at the global rating agency, Fitch.

The report said that Vi needs to increase its tariff prices further to boost investors' confidence as it is looking for funding. Notably, the company needs to pay adjusted gross revenue (AGR) dues of Rs. 50,00 crores. Besides, Vi needs to make an investment in the 4G network to attract subscribers.

Airtel And Reliance Jio Might Launch New Offers

On the other hand, market sources believe that Airtel and Reliance Jio might not go for a tariff hike as they want to retain customers. Sources also pointed out that both leading telecom operators might launch new offers or benefits to attract Vi customers via mobile number portability.

Furthermore, analysts projected that Vi might lose 1.8 million customers in the Q4 of the last financial year. They said there are chances that India's leading telecom operators Airtel and Reliance Jio adds new customers between 7 to 14 million in the telecom sector and might more users in the fiber-to-the-home (FTTH) segment.